Correlation between Wealth and Homeownership
- People who have a steady job (2 years of employment) and at least a credit score of at least 660 (credit programs may vary from time to time) would be eligible for the benefits of homeownership which are:
a.) A mortgage which provides financial stability for a family. For example, when a downturn happens in the economy jobs are a loss. Those who own their homes are more likely to be able to use their homes to weather the financial storm. Ex.) A car breaks down, a family medical problem occurs or you want to send your kids to college (potentially saving them hundreds of thousands of dollars).
b.) Homeownership appreciates on an average annually at a rate of 3-5%. In most cases, 20% down in a decent location with a conventional loan or even a first time home buyers loan with a fixed-rate mortgage will benefit from market prices rising.
c.) It's Forced Savings: Paying a mortgage month by month is a forced savings mechanism that builds equity while simply occupying a place of your own. Yes, the responsibility will be all on the Landlord but having skin in the game outweighs not having any. Instead of renting, it strategically makes sense to sacrifice, choose careers based on loan opportunities, and purchase a home for financial security and stability.
d.) Uncle Sam. Cashflow can accumulate faster and larger proportion if it is tax less. Most Americans work in a W2 job. Which is taxed at the highest rate. Securing a home would allow for the person who is working a W2 job to right of their monthly interest payment. Deducting the amount of taxes that are paid at the end of each year (see a tax professional for a more accurate description).
"For those of us concerned with tackling disparities, this season is a chance to reflect on the power of homeownership as a tool for advancing the economic security of more Americans. The challenge we face is opening that pathway to more families, especially those Americans long locked out of this wealth-building opportunity. " - Huff Post
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